“While many have compared major differences in economic systems across countries—where there are many moving parts and it’s difficult to convincingly identify the true source of those differences—this study focuses on a single industry that has undergone a profound reorganization,” said Cicala. “The study is an additional piece of evidence that, while not perfect, markets perform well relative to the alternative.”

He used a unique policy shift within the U.S. electricity system to compare a market versus command-and-control regulatory structure. Periodically since the late 1990s, some regions of the country changed overnight from using vertically-integrated local monopolies to make power decisions to a decentralized market-based auction system